How brokers can thrive in an age of digital transformation

Will AI replace mortgage brokers?

How brokers can thrive in an age of digital transformation


By Ryan Johnson

Like many industries, mortgage broking is being reshaped by digital workflows and AI. This represents both a threat and an opportunity for brokers, according to Alex Veljancevski (pictured above), director of Sydney-based brokerage Eventus Financial.

Understandably, some brokers are worried they’ll be replaced by robots.

The thinking is that anything that can be automated will be automated, so eventually the entire broking process could be done by an algorithm, making brokers redundant.

Veljancevski agrees that there's some truth to this.

"AI technology is already impressive and will only get more sophisticated in the future," he said. "So, yes, there will almost certainly come a time when tasks currently done by humans will be done by AI."

However, Veljancevski argued that this overlooks two important points. "First, technological advances don't present us with a binary choice of 'everything will be perfect for brokers' or 'everything will be disastrous for brokers' – often, the reality is somewhere in between," he said.

"Second, where change is negative, brokers don't have to be passive – we can change our business models."

Professor Richard Baldwin, emeritus professor of international economics at the Geneva Graduate Institute of International and Development Studies, put it like this: "AI won't take your job; it's someone using AI that will take your job."

“In other words, if we want to keep doing broking the same way forever, then AI is a threat. But if we’re prepared to adapt, AI is an opportunity,” said Veljancevski.

Will AI replace mortgage brokers?

Like it or not, new technologies, such as generative artificial intelligence, are already revolutionising the mortgage industry.

However, consumers are distrustful about the extent of how it's used. Research released in January showed that Australians generally don’t trust generative AI to help select their mortgage plans.

This showed that most borrowers still value the human touch of mortgage brokers throughout the home loan process… at least for now.

Veljancevski said he sees a future in which robots do “fiddly” tasks, like data entry and document verification that are an important part of the broking process but also mundane.

“That will free up brokers to spend more time having in-depth client conversations and devising strategic solutions – which are not only the more enjoyable parts of the job but also the most valuable from a client’s perspective,” he said.

“So, AI will provide better outcomes for both clients and brokers. Win-win.”

How brokers can face the digital future

That’s not to say change will be easy or painless: buying new tools and learning new processes will require an investment of time and money. But that’s what brokers have always had to do, according to Veljancevski, even before the arrival of AI.

With that in mind, Veljancevski made three recommendations.

  1. Be willing to change.

“Pay close attention to what the top brokers are doing and the presentations you hear at PD days,” Veljancevski said.

  1.  Learn to distinguish between “game-changing technology and gimmicky technology”.

“Something that makes brokers more efficient or delivers better client outcomes is game-changing; something that looks flash but does neither of those things is gimmicky.”

  1. Double down on things AI can’t do

“Focus on things such as providing strategic advice, personalised service and life-of-loan support. That will give clients a reason to keep choosing you over the robots.”

What do you think about AI’s effect on the mortgage industry? Comment below.

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